Crossamerica Partners LP ((CAPL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for CrossAmerica Partners LP painted a mixed picture for the company’s financial health. While there were significant strides in asset sales and debt reduction, which contributed to an increase in net income, the company continues to face challenges in its retail and wholesale segments. Declines in EBITDA and distributable cash flow further underscore the ongoing market difficulties. Despite improved expense management, the overall performance was impacted by reduced gross profits.
Record Dollar Value of Asset Sales
CrossAmerica Partners reported an impressive $64 million in proceeds from asset sales during the quarter. These proceeds were primarily used to pay down debt, marking a strategic move to strengthen the company’s financial position.
Net Income Increase
The company saw a notable increase in net income for the second quarter of 2025, reaching $25.2 million compared to $12.4 million in the same quarter of 2024. This growth was largely driven by gains from asset sales, highlighting effective capital management.
Strong Inside Sales Performance
Inside sales on a same-site basis showed resilience, with a 2% year-over-year increase. Notably, non-cigarette inside sales rose by 4%, indicating strong consumer demand in certain product categories.
Debt Reduction
Thanks to the asset sales, CrossAmerica Partners managed to reduce its debt by over $50 million, significantly lowering its leverage ratio. This reduction is a positive step towards enhancing the company’s financial stability.
Improved Expense Management
The company demonstrated improved expense management, with total operating expenses increasing by only 1% year-over-year. Moreover, second-quarter expenses were 3% lower than those in the first quarter of 2025.
Retail Segment Gross Profit Decline
The retail segment experienced a slight decline in gross profit, down 1% to $76.1 million. This decrease was primarily due to a reduction in motor fuel gross profit, reflecting challenges in the retail fuel market.
Wholesale Segment Gross Profit Decline
The wholesale segment faced a more significant decline, with gross profit dropping by 12% to $24.9 million. This was driven by a decrease in fuel volume, fuel margin, and rental income.
Adjusted EBITDA Decline
Adjusted EBITDA for the second quarter stood at $37.1 million, marking a decrease of $5.5 million compared to the same period in 2024. This decline reflects the challenges in maintaining profitability amidst market pressures.
Distributable Cash Flow Decrease
The company’s distributable cash flow decreased to $22.4 million from $26.1 million in the second quarter of 2024, indicating a need for strategic adjustments to improve cash flow generation.
Same-Store Retail Volume Decline
Same-store retail volume saw a 2% year-over-year decline, mirroring the challenging market dynamics. However, it performed better than the national volume demand decline of 4%.
Forward-Looking Guidance
During the earnings call, CrossAmerica Partners provided forward-looking guidance, emphasizing strategic actions such as selling 60 sites for $64 million and reducing debt by over $50 million. The company aims to optimize its operating portfolio and strengthen its financial position. Despite a challenging demand environment, the company is focused on strategic divestitures and financial discipline to position itself for future success.
In summary, the CrossAmerica Partners LP earnings call highlighted a mixed financial landscape. While there were positive developments in asset sales and debt reduction, challenges in the retail and wholesale segments persist. The company’s strategic focus on divestitures and financial discipline aims to navigate the current market environment and set the stage for future growth.